Picower's Will Leaves Millions To Widow

The estate of Jeffry Picower, a New York financier who was one of the biggest financial beneficiaries of Bernard Madoff's fraud, has left $200 million to his widow, even as the estate faces huge potential liabilities for its profits from the fraud, according to court documents.

Picower, 67, drowned last month in a pool at his Palm Beach residence. He had been suffering from Parkinson's disease, among other ailments, and his death was attributed to natural causes.

According to the will, filed Tuesday in New York probate court, Picower's widow, Barbara, is in line to receive $100 million outright and another $100 million in trust. His adult daughter, Gabrielle, is to receive $25 million, and $10 million in trust is slated to go to longtime trusted employee April Freilich.

The estate is still in negotiations to hand over profits Picower received from investing with Madoff since the 1970s. Picower's attorney, William Zabel, said the estate will hand over at least or about $2 billion to a court-appointed trustee who is gathering assets for victims. Zabel said he couldn't be more specific about what the final amount would be.

Whatever the final total is, it will go into a pot designated to paying back Madoff's victims, who have collectively lost at least $20 billion. The trustee has recovered $1.5 billion but has filed lawsuits seeking billions more from some of the Madoff firm's institutional clients or individuals who profited enormously at the expense of other investors.

The $2 billion figure that Zabel said the estate would give up represents the approximate amount Picower withdrew from his Madoff accounts in the six years before the Madoff firm collapsed, and the trustee has a strong claim to that money under bankruptcy laws.

However, the Picower estate is less amenable to the rest of the trustee's claim, which involves billions of dollars in withdrawals made by Picower going back decades, Zabel says. The trustee has said he could recover those funds because Picower knew or should have known he was reaping the benefits of a fraud, an accusation Picower denied.

The trustee, Irving Picard, said on Tuesday that there have been negotiations but declined to comment further.

The will also gave a clue about how Picower may have met Madoff. One of the beneficiaries of Picower's will is the daughter of Michael Bienes, who helped run an accounting firm that steered hundreds of millions of dollars in investor money to Madoff before it was shut down by the Securities and Exchange Commission in 1992.

Zabel said that Picower's sister, Emily, was once married to Bienes but had gotten a divorce about 20 years ago, and that Picower and Bienes weren't close.

Picower had been under investigation by criminal prosecutors at the Manhattan U.S. Attorney's Office, which prosecuted Madoff. The trustee has accused Picower of requesting - and receiving - specific investment gains from Madoff's firm, including gains that would be "backdated" to prior months or years.